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give it another 10 years... around 2025, the "new normal" will be 10% yearly returns and everyone will be talking about how we're too financially advanced and smart to ever get stuck in another lost decade like the 00's - wonder what the next bubble will be? The 30's might be painful.

I think what is different is "last time" is not felt to necessarily be representative....in other words there is no certainty that past performance will influence future results. Some feel that the prior 150 years is too short a time period to say what "normal" should be. No matter how you slice it there are enough important differences between the past and the future to make forecasting dicey. The changes in our own country and the world all interact in unforeseen and unforeseable ways.

The 50's started with half the world in ruins and a great demographic boom fueling a strong demand for goods. The 80's started with a cheap stock market and cheap bond market. Today? The bond market is very expensive, the stock market is not cheap, demographics have become a headwind, and demand is tepid at best. And while credit is cheap, we won't be able to spend our way out of this one given our already high level of indebtness.

Maybe not quite when trying to extrapolate market returns. In much of the past, the market was mostly the US market, not as much globalization. Now with emerging markets, etc. market returns are not necessarily the same. In fact the so called "average" returns of 7%-8% are pretty much a US average...in other countries they have not seen returns like that...hence in answering the OP question...the reason this time might be different is that it was never fair to make long term statements about averages when it was a localized and narrow phenomenon in the first place.

I have no idea what the rate of return going forward is going to be but it's interesting to see that my annual rate of return (per Quicken) since 1/1/2009 is 12%. This is on a conservative 55/45 equities/bond allocation. I'm sure many have done far better. Over the last four years there have been many many forecasts of armagedon and worse (asteroids anyone?). I've come to the conclusion that the only thing I can do is stick to my AA and ignore predictions. Maybe really and truly nobody knows and the Gurus have a knack for marketing and self promotion but little else.

I will be the contrarian and question your basic premise that we are 'after' anything. I think we are still in the middle of something that is not over yet. One could conjecture that just because we are no longer in the deepest part of the ocean, and were able to come up for air, that does not mean we are on dry land yet.

The less rosy predictions are based on an assumption that the basis for returns (in a general sense) has itself been devalued. In a way, that seem reasonable.

For example: If population increases faster than innovation can dream-up new ways to provide for the same standard of living over the greater number of people, then resource scarcity will depress average standard of living, and that will reach back into financial returns in various ways.

The same mechanism would result from a reduction in the ability to exploit superior power overseas, either due to other nations learning how to retain a greater portion of the benefits from their own value, or simply due to a reduction in the willingness to engage in such exploitation of opportunities.

I think there is also a feeling that "where-we've-been" has been supported to a great extent on mortgaging the future, and that credit is running out. That also seems reasonable - you cannot keep borrowing more and more forever right? - but that's really only an appeal to sensibility. There is no mathematically provable ceiling there. The limit, and therefore the effect of any such limit, would be imposed by human discretion, to a great extent, and there are good reasons to think that that will happen, but no real assurance that it will.

It does seem to me that the measures that have been applied throughout the last eighty years or so to keep the economy growing are losing their efficacy - that the same things that our leaders did in the in the past, following the lead of those before them and those before them, are going to be sucking wind. We figuratively (and probably literally, too) need to find a different fuel for the engine. I'm not terribly optimistic. A SWR of 4% would probably point me toward ER at 55, and to be honest I may not have a choice, but if I do, I think it would be foolish to make decisions, heavily dependent on Social Security income (as my figuring is) and a SWR of 4%.

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